Korea’s 2 LCD leaders going for broke
LG Display, the world’s second-biggest supplier of liquid crystal display (LCD) screens plans to make record facility investments in 2011 to outrival its biggest competitor Samsung Electronics.
The ambitious blueprint comes after introducing its cutting-edge three dimensional or 3D technology dubbed film patterned retard (FPR), igniting the “3D standardization war’’ against the current leader Samsung in the highly-lucrative segment.
“LG Display will invest around 5 trillion won or $4.3 billion in facilities next year,’’ said chief executive Kwon Young-soo in an interview with The Korea Times in Beijing, China, Thursday.
LG Display CEO Kwon Young-soo
This is an increase of more than 10 percent from this year’s total investment of 4.5 trillion won, said a company spokesman, Kim Jun-kyu.
The CEO said LG Group’s display unit is not worrying about market volatilities throughout the year 2011 as he expects higher consumer demand for value-added digital devices to come mainly to counter and balance the drop in popularity of the light-emitting diode (LED)-backlit LCD TVs.
“LG is still worrying about the lack of 3D-customized content, yet, the overall LCD industry will remain stable for the next year as our fellow overseas rivals are still maintaining a conservative stance regarding overly aggressive investments for various reasons,’’ Kwon said.
The LCD industry is highly volatile and cyclical upon macro-economic aspects because consumers usually cut back on their spending on LCD-embedded products when the economy is faltering.
The industry is facing another oversupply amid continued uncertainties in consumer demand for digital gadgets in developed markets including North America and China.
LG has already been cutting its production output in response to the weaker market, while Samsung is also lowering its factory utilization rates to 93 percent.
“I will not comment on the profit outlook for the fourth quarter but LG doesn’t see any hurdles big enough to upset our businesses for the next year with higher hopes for 3D televisions,’’ according to the chief executive.
LG decided on the operation timing of its LCD factory in southern Guangzhou, he said.
The Korean company has recently received Bejing’s final approval to construct its first LCD facility in China that will cost $4 billion.
Aims for ‘3D standardization’
In the interview, Kwon said he is highly positive of passing Samsung Electronics in the global 3D screen market as its latest FPR technologies are receiving favorable reviews from leading Chinese television makers including Skyworth and TCL.
“LG will have a direct confrontation with Samsung in 3D TVs. We will change the market paradigm by aggressively promoting the FPR technology,’’ he said, adding LG targets obtaining 70 percent of next year’s global 3D screen market.
“Global shipments of LCD TVs will reach 250 million sets in 2011 and LG expects 3D TVs will take up at least 10 percent. Out of the projections, the 70 percent for LG is quite conservative,’’ said the chief executive.
“Consumers are ready to pay a 20 percent premium to buy a well-made 3D television,’’ said Kwon.
The FPR technology realized a “flicker- and crosstalk-free’’ screen, doubled the brightness level of current products and highlighted polarized glasses which are more comfortable and affordable, LG officials said.
Asked about detailed pricing plans, the CEO said his company is ready to take needed measures for an early boom. TVs equipped with the technology will be launched in South Korea from March, followed by the United States and Europe.
3D requires viewers to wear a pair of special glasses. The industry’s current main glasses are made with “shuttered glass” or “SG technology” developed by Samsung.
SG is powered by a small battery, which blocks out one eye or the other on alternate frames at the same high speed, synchronized with the image being displayed on TV via a wireless connection with the set.
Studies and scientists have claimed that the brain is thus fooled into creating a 3D image in the mind’s eye, which can also cause headaches, nausea and sickness.
“TV makers with SG technology are choosing to work with us after the end of the local `Labor’s Day’ promotional campaign in May,’’ said Han Sang-beom, the head of LG Display’s TV business division, told The Korea Times, separately.
“LG Display has just fired up an official war with Samsung in `3D standardization.’ We are optimistic about leading the way,’’ said the CEO, expecting visible results by the third quarter of next year.